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State Name: New Jersey
State Name underscore: New_Jersey
State Name dash: New-Jersey
State Name lower underscore: new_jersey
State Name lower dash: new-jersey
State Name lower: new jersey
State Abbreviation: NJ
State Abbreviation Lower: nj

On December 18, 2013, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to purchase additional agency mortgage-backed securities (MBS) at a pace of about $35 billion per month and longer-term Treasury securities at a pace of about $40 billion per month, beginning in January 2014. The existing December schedules for agency MBS purchases at a pace of $40 billion per month and Treasury securities purchases at a pace of $45 billion per month remain in effect until that time. The FOMC also directed the Desk to maintain its existing policies of reinvesting principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. Full release

With just over an hour to go until FOMC, bond markets have backed completely out of their earlier selling spree. That weakness had followed the 5yr Note auction and took Fannie 4.0s down to 103-08, more than a quarter point lower on the day. Fannie 4.0s are now back up to pre-auction levels (slightly above actually) at 103-14. 10yr yields are back down to 2.88 after hitting 2.90 following the auction. Reprice risk is back to neutral and waiting on FOMC once again.

It was another inconsequential overnight session as global financial markets await today's FOMC Announcement. Volume was low and volatility was completely absent until 8am.

After that, it became apparent that domestic accounts already had selling on their mind and were just waiting for the open. Volume picked up a bit and 10yr yields began rising ahead of the Housing Starts data, moving from 2.848 to 2.864.

During that same time, MBS were still getting their bearings for the morning as they tend to struggle with liquidity much more than Treasuries in the first hour. Fannie 4.0s opened 4/32nds weaker and fell another 2/32nds before the data.

After the data, both MBS and Treasuries sold off a bit further, but nothing commensurate with the magnitude of the Housing Starts 'beat.' In other words, we'd probably have seen much more weakness if we weren't waiting for the FOMC Announcement this afternoon.

From 2.864, 10yr yields rose to just under 2.88 and are now back down to 2.867. Interestingly enough, but perhaps unsurprisingly, all of this morning's movement has been well inside this week's previous highs and lows for both Treasuries and MBS.

- Market Reaction: MBS and Treasuries sold off sharply at first. Though they're still weaker than pre-data levels, they'd finding their footing. More importantly, the reaction was nothing compared to what we might have seen if the FOMC Announcement wasn't coming this afternoon.

BUILDING PERMITS
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,007,000.
This is 3.1 percent (±1.1%) below the revised October rate of 1,039,000, but is 7.9 percent (±1.6%) above the November 2012
estimate of 933,000.
Single-family authorizations in November were at a rate of 634,000; this is 2.1 percent (±1.1%) above the revised October figure of
621,000. Authorizations of units in buildings with five units or more were at a rate of 346,000 in November.

HOUSING STARTS
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,091,000. This is 22.7 percent (±13.2%)
above the revised October estimate of 889,000 and is 29.6 percent (±19.8%) above the November 2012 rate of 842,000.
Single-family housing starts in November were at a rate of 727,000; this is 20.8 percent (±10.7%) above the revised October figure of
602,000. The November rate for units in buildings with five units or more was 354,000.

HOUSING COMPLETIONS
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 823,000. This is 0.1 percent (±9.5%)*
below the revised October estimate of 824,000, but is 21.6 percent (±11.3%) above the November 2012 rate of 677,000.
Single-family housing completions in November were at a rate of 596,000; this is 3.2 percent (±11.6%)* below the revised October
rate of 616,000. The November rate for units in buildings with five units or more was 221,000.

- Market Reaction: MBS and Treasuries sold off sharply at first. Though they're still weaker than pre-data levels, they'd finding their footing. More importantly, the reaction was nothing compared to what we might have seen if the FOMC Announcement wasn't coming this afternoon.

BUILDING PERMITS
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,007,000.
This is 3.1 percent (±1.1%) below the revised October rate of 1,039,000, but is 7.9 percent (±1.6%) above the November 2012
estimate of 933,000.
Single-family authorizations in November were at a rate of 634,000; this is 2.1 percent (±1.1%) above the revised October figure of
621,000. Authorizations of units in buildings with five units or more were at a rate of 346,000 in November.

HOUSING STARTS
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,091,000. This is 22.7 percent (±13.2%)
above the revised October estimate of 889,000 and is 29.6 percent (±19.8%) above the November 2012 rate of 842,000.
Single-family housing starts in November were at a rate of 727,000; this is 20.8 percent (±10.7%) above the revised October figure of
602,000. The November rate for units in buildings with five units or more was 354,000.

HOUSING COMPLETIONS
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 823,000. This is 0.1 percent (±9.5%)*
below the revised October estimate of 824,000, but is 21.6 percent (±11.3%) above the November 2012 rate of 677,000.
Single-family housing completions in November were at a rate of 596,000; this is 3.2 percent (±11.6%)* below the revised October
rate of 616,000. The November rate for units in buildings with five units or more was 221,000.

On December 18, 2013, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to purchase additional agency mortgage-backed securities (MBS) at a pace of about $35 billion per month and longer-term Treasury securities at a pace of about $40 billion per month, beginning in January 2014. The existing December schedules for agency MBS purchases at a pace of $40 billion per month and Treasury securities purchases at a pace of $45 billion per month remain in effect until that time. The FOMC also directed the Desk to maintain its existing policies of reinvesting principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction. The Committee’s sizable and still-increasing holdings of longer-term securities should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. Full release

With just over an hour to go until FOMC, bond markets have backed completely out of their earlier selling spree. That weakness had followed the 5yr Note auction and took Fannie 4.0s down to 103-08, more than a quarter point lower on the day. Fannie 4.0s are now back up to pre-auction levels (slightly above actually) at 103-14. 10yr yields are back down to 2.88 after hitting 2.90 following the auction. Reprice risk is back to neutral and waiting on FOMC once again.

It was another inconsequential overnight session as global financial markets await today's FOMC Announcement. Volume was low and volatility was completely absent until 8am.

After that, it became apparent that domestic accounts already had selling on their mind and were just waiting for the open. Volume picked up a bit and 10yr yields began rising ahead of the Housing Starts data, moving from 2.848 to 2.864.

During that same time, MBS were still getting their bearings for the morning as they tend to struggle with liquidity much more than Treasuries in the first hour. Fannie 4.0s opened 4/32nds weaker and fell another 2/32nds before the data.

After the data, both MBS and Treasuries sold off a bit further, but nothing commensurate with the magnitude of the Housing Starts 'beat.' In other words, we'd probably have seen much more weakness if we weren't waiting for the FOMC Announcement this afternoon.

From 2.864, 10yr yields rose to just under 2.88 and are now back down to 2.867. Interestingly enough, but perhaps unsurprisingly, all of this morning's movement has been well inside this week's previous highs and lows for both Treasuries and MBS.

- Market Reaction: MBS and Treasuries sold off sharply at first. Though they're still weaker than pre-data levels, they'd finding their footing. More importantly, the reaction was nothing compared to what we might have seen if the FOMC Announcement wasn't coming this afternoon.

BUILDING PERMITS
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,007,000.
This is 3.1 percent (±1.1%) below the revised October rate of 1,039,000, but is 7.9 percent (±1.6%) above the November 2012
estimate of 933,000.
Single-family authorizations in November were at a rate of 634,000; this is 2.1 percent (±1.1%) above the revised October figure of
621,000. Authorizations of units in buildings with five units or more were at a rate of 346,000 in November.

HOUSING STARTS
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,091,000. This is 22.7 percent (±13.2%)
above the revised October estimate of 889,000 and is 29.6 percent (±19.8%) above the November 2012 rate of 842,000.
Single-family housing starts in November were at a rate of 727,000; this is 20.8 percent (±10.7%) above the revised October figure of
602,000. The November rate for units in buildings with five units or more was 354,000.

HOUSING COMPLETIONS
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 823,000. This is 0.1 percent (±9.5%)*
below the revised October estimate of 824,000, but is 21.6 percent (±11.3%) above the November 2012 rate of 677,000.
Single-family housing completions in November were at a rate of 596,000; this is 3.2 percent (±11.6%)* below the revised October
rate of 616,000. The November rate for units in buildings with five units or more was 221,000.

- Market Reaction: MBS and Treasuries sold off sharply at first. Though they're still weaker than pre-data levels, they'd finding their footing. More importantly, the reaction was nothing compared to what we might have seen if the FOMC Announcement wasn't coming this afternoon.

BUILDING PERMITS
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,007,000.
This is 3.1 percent (±1.1%) below the revised October rate of 1,039,000, but is 7.9 percent (±1.6%) above the November 2012
estimate of 933,000.
Single-family authorizations in November were at a rate of 634,000; this is 2.1 percent (±1.1%) above the revised October figure of
621,000. Authorizations of units in buildings with five units or more were at a rate of 346,000 in November.

HOUSING STARTS
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,091,000. This is 22.7 percent (±13.2%)
above the revised October estimate of 889,000 and is 29.6 percent (±19.8%) above the November 2012 rate of 842,000.
Single-family housing starts in November were at a rate of 727,000; this is 20.8 percent (±10.7%) above the revised October figure of
602,000. The November rate for units in buildings with five units or more was 354,000.

HOUSING COMPLETIONS
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 823,000. This is 0.1 percent (±9.5%)*
below the revised October estimate of 824,000, but is 21.6 percent (±11.3%) above the November 2012 rate of 677,000.
Single-family housing completions in November were at a rate of 596,000; this is 3.2 percent (±11.6%)* below the revised October
rate of 616,000. The November rate for units in buildings with five units or more was 221,000.

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